0:00
gambling and sugary drinks. Those are
0:02
devices Rachel Reeves is planning to tax
0:05
later this year. But adding extra levies
0:08
may not result in more revenue the
0:10
Chancellor so craves. Reports have
0:13
suggested that increasing taxes could
0:15
raise around £3 billion and former Prime
0:18
Minister Gordon Brown has said those
0:20
funds should be used to pay for child
0:22
benefits. Economists in the city and at
0:24
top think tanks anyway believe that
0:25
Rachel Ree will have to raise at least
0:27
20 billion pounds in taxes to plug a
0:29
fiscal hole created by lower growth
0:32
forecasts, higher debt interest payments
0:34
and higher welfare spending. But
0:36
increasing sin taxes may not be the way
0:39
to go for the chancellor. In a report
0:41
published in July, the Office for Budget
0:43
Responsibility, which judges the costs
0:45
and benefits of all government policies,
0:48
said forecast for the intake from these
0:50
taxes in the past, were overestimates in
0:53
previous reports. And so, errors in
0:55
forecasting for sin taxes could see it
0:58
make more moderate projections at this
1:00
year's autumn budget. And separate
1:02
analysis by the Scotch Whiskey
1:04
Association has shown that the Treasury
1:06
collected 676 million pounds less tax
1:09
than the OBR forecast for spirits duties
1:12
in March 2023. This points to
1:15
significance which forecasting errors
1:17
could have on public finances which
1:20
could lead to more government borrowing
1:22
than hoped for. Tax experts said
1:24
government revenue forecasters often
1:27
struggle to measure behavioral changes
1:29
when excise duties are changed. They
1:31
said this tendency meant tax revenue
1:34
from sin taxes would often be
1:36
overestimates. The Scotch Whiskey
1:38
Association's chief executive Mark Kent
1:41
has meanwhile argue that the Treasury
1:43
and OBR were not taking a positive
1:45
revenue impacts of reducing duties. Kent
1:49
said fresh tax data showing a 10% fall
1:51
in revenue from spirits taxes over the
1:54
last year suggested the government would
1:55
be left with further problems in the
1:57
coming years. And were the government to
1:59
cut duties on spirits and other
2:01
products, industry bosses argue the
2:03
government could boost economic growth
2:05
and therefore benefit from a higher
2:07
taxed intake. The Scotch Whiskey
2:09
Association called on the government to
2:11
fix its unequal alcohol duty system and
2:14
listen to the on the ground concerns of
2:16
businesses who have had to deal with
2:18
tax. For more news on taxes, head over
